Decision making is a critical function of management. However, care needs to be taken to ensure that decisions are not taken on an emotional basis. For more such innovative content on management studies, join WeSchool PGDM-DLP Program: http://bit.ly/ZEcPAc

1. Welingkar’s Distance Learning Division
CHAPTER-06
DECISION-MAKING
We Learn – A Continuous Learning Forum

2. Welingkar’s Distance Learning Division
Introduction
 Decision-making is also one of the functions of the
management. The success of management depends
upon the quality of decision. If the manager fails to
take correct decision, he may not extract any work
from his sub-ordinates and may not find a way to
finish his work also. Some of the decisions are taken
emotionally. This should be taken with great care.
Emotional decision leads to a lot of confusion. So,
the decision-making is a work of the superiors.
We Learn – A Continuous Learning Forum

3. Welingkar’s Distance Learning Division
We Learn – A Continuous Learning Forum

4. Welingkar’s Distance Learning Division
Definition
 “Decision making is a process involving
information, choice of alternative actions,
implementations and evaluation that is
directed to the achievement of certain stated
goals.”
We Learn – A Continuous Learning Forum

5. Welingkar’s Distance Learning Division
Characteristics of Decision-Making
 Decision-making is selection process. The best alternative is
selected out of available alternatives. If there is only one
alternatives, there is no decision-making.
 Decision-making is the end process. Decision-making is
presented by detailed discussion and selection of
alternatives.
 Decision-making is the application of intellectual abilities to a
great extend. An intelligent man alone can take a good
decision.
We Learn – A Continuous Learning Forum

6. Welingkar’s Distance Learning Division
Characteristics of Decision-Making
 Decision gives happiness to an endeavor who takes
various steps to collect the information which is
likely to affect a decision.
 Decision-making is situational. An individual takes
decision according to the situations prevailing.

 It is a dynamic process. It is taken to achieve the
objectives of an organisation.
We Learn – A Continuous Learning Forum

7. Welingkar’s Distance Learning Division
Characteristics of Decision-Making
 Decision-making involves the evaluation of available
alternatives through—critical appraisal methods.
 A decision may be both negative and positive. A
decision may direct others to do or not to do.
 Decision––maker has the evaluation of decision
which involves the using of resources in specified
ways.
We Learn – A Continuous Learning Forum

8. Welingkar’s Distance Learning Division
Elements of decision-making
 A problem is fully analyzed and the available
alternatives are considered before taking a decision.
 The best decision-making requires intelligence,
experience and insight into a problem.
 A decision is taken according to the environment of
business.
We Learn – A Continuous Learning Forum

9. Welingkar’s Distance Learning Division
Elements of decision-making
 Centralization and decentralization of authority
affect the decision indirectly.
 The psychology of an individual is involved in
decision-making.
 Decisions are taken when they are needed.
 Employees are also involved in decision-making
process
We Learn – A Continuous Learning Forum

10. Welingkar’s Distance Learning Division
Elements of decision-making
Political and social environment of business affect the decision-
making if the management takes a decision after consulting the
employees, the following advantages may accrue:
 Better relations with employees
 Loyalty to the management.
 There is no hindrance in the implementation of a decision.
 Efficiency of the employees is increased.
We Learn – A Continuous Learning Forum

11. Welingkar’s Distance Learning Division
Decision-Making Process
Identification of a Implementation
Problem
Conversion of
Diagnosing the Verifying the into action
Problem decision
Selection of best
Collect and analyze alternative
the relevant information
Discovery of alternative Analyzing the Screening of
course of action alternatives alternatives
We Learn – A Continuous Learning Forum

12. Welingkar’s Distance Learning Division
Principles of decision-making
 Marginal theory of decision-making:
• It is based on principle of diminishing
returns
• Applied for sales, advertisement,
promotion, training
We Learn – A Continuous Learning Forum

13. Welingkar’s Distance Learning Division
Principles of Decision-Making
 Mathematical theory:
• Venture analysis, game theory, probability
theory and waiting theory are examples
• It give scientific approach to manager
We Learn – A Continuous Learning Forum

14. Welingkar’s Distance Learning Division
Principles of Decision-Making
 Psychological theory
• Decision taken on basis of aspirations,
technological skill, personality, social status
and organisation status.
We Learn – A Continuous Learning Forum

15. Welingkar’s Distance Learning Division
Principles of decision-making
 Principle of limiting factors
• Fundamental of a problem are studied.
• An inference or a conclusion is drawn
We Learn – A Continuous Learning Forum

16. Welingkar’s Distance Learning Division
Principles of decision-making
 Principle of participation:
• Principle is based on human behavior and
human relationship.
• Subordinate should be consulted.
We Learn – A Continuous Learning Forum

17. Welingkar’s Distance Learning Division
Principles of decision-making
 Principle of alternatives:
• All alternatives are evaluated and
screened and best alternative is taken for
decision making.
We Learn – A Continuous Learning Forum

18. Welingkar’s Distance Learning Division
Characteristics of good decision
or effective decision
 Decision is taken after passing various stages. The basic
objective of passing through all the stages is to solve the
problems. The solution of the problem depends on how
effectively the decision has been made or implemented.
 Action orientation:
 Goal direction:
 Efficiency in implementation:
We Learn – A Continuous Learning Forum

19. Welingkar’s Distance Learning Division
Administrative problems in
decision-making
 Accuracy:
 Environment for decision:
 Timely decision:
 Communication of decision:
 Participative decision-making:
 implementation:
We Learn – A Continuous Learning Forum

20. Welingkar’s Distance Learning Division
Types of decision
 Programmed decision :
 Non-programmed decision:
 Major decision
 Minor decision
 Operative decision
 Organizational decision
We Learn – A Continuous Learning Forum

21. Welingkar’s Distance Learning Division
Types of decision
 Personal decision
 Individual decision
 Group decision
 Departmental decision
 Non-economic decision
 Crises decision
 Research decision
We Learn – A Continuous Learning Forum

22. Welingkar’s Distance Learning Division
Personal phase of decision-making
There are some differences in decision-making .These
are due to personal characteristics due to
 Intelligence
 Education
 Experience
 Courage
 Motivation
 Forecasting ability
 Self-confidence
We Learn – A Continuous Learning Forum